The idea of introducing a merit pay for excellent performance in a team of employees is doubtlessly a good idea – it helps “gain employees’ commitment” (York 309), develops the feeling of self-importance in the people, who are especially good at their job, and motivates the “underachievers” to improve their performance.
Therefore, creating a merit pay plan for a cross-functional team will obviously have some fruitful results. Because of the difficulty in evaluating and comparing the contribution of every staff member within a cross-functional team and providing the corresponding incentives for those with the greatest score, it will be reasonable to suggest that a merit pay plan should be created in order to both equalize salaries and acknowledge ranking efforts.
The goals for the cross-functional team in question can be defined as improvement of the team’s overall performance by 15% and the resulting production of 700 units instead of 600; increase of individual members’ performance by 5% each; motivating specific team members, whose performance is statistically lower than the team average, so that each employee could at least meet the average standards established in the company’s list of rules and regulations; raising the quality of communication in general and information management in particular within the specified group by 20% (with an average of 5% accidents of information misinterpretation instead of the current 25%) by implementing the strategy of shared knowledge.
The given task is going to be admittedly hard to carry out, seeing how the group in question is comparatively large, with eight people, whose further action need to be coordinated, yet with due effort, the mission will be completed within three weeks at most.
Once a certain stage of the goals implementation is completed, each of the team members will receive a financial incentive. As soon as the goals are achieved, the staff members that have achieved the greatest results will be given a financial reward; in addition, their efforts will be acknowledged as the company leader expresses his gratitude during the end-of-the-month meeting.
Speaking of the funds and the way in which they are going to be distributed, $150,000 is going to be used for the purposes specified above.
The aforementioned sum is going to be split in the following way: 20% of the total merit pool should be used as a response to the efforts of the employees that work extra hours in order to achieve better results; 70% of the total sum will be used as incentives for those employees who have achieved the most outstanding results; 8% of the money will be spent on conducting reward activities, whereas the remaining 2% will be saved for the possible extra costs on reward ceremonies. The given actions will doubtlessly “show employees that their direct efforts will affect the desired results” (York 243).
It goes without saying that calculating the score of every single employee in the team will take some time; therefore, the implementation of the proposed merit pay plan will not be carried out instantly.
It can be assumed that the evaluation of the employees’ performance will take at least two weeks; with all possible obstacles and delays into account, it will be safe to say that the calculation procedure will be completed in three weeks. Once the given merit pay plan is implemented, it will doubtlessly improve the motivational issues within the specified cross-functional team, as well as allow for the recognition of the efforts of the most successful and diligent staff.
Works Cited
York, Kenneth M. Applied Human Resource Management: Strategic Issues and Experiential Exercises. Thousand Oaks, CA: SAGE Publications, 2010. Print.